Speaking on the growing problem of piling debt, RBI deputy governor, Viral Acharya clarified that inducing more and more funds by reserve bank will not solve the problem and added that the lenders should take initiatives to recover bad loans.
India currently has the highest stressed asset ratio among the leading countries. Off late, RBI has started to initiate actions to strengthen the banking system and to force mergers of weak performing banks. It is also considering privatisation of some of these banks and lenders to improve the situation in the coming time.
At an event in Kolkata on Friday, Viral Acharya said that clearing up the debt sheets of various financial institution is one of the most needed things at the moment and RBI is initiative plans to ensure that. He also added that this step will lead to more jobs creation and the economy as a whole will improve.